State Auto Insurance is continuing its exit from the specialty insurance business, selling off more of the business of its excess and surplus lines subsidiary, Rockhill Insurance Group.
The buyer this time is specialty insurance holding company K2 Insurance Services, based in San Diego. K2 is buying the general liability business of Rockhill’s Partners General Insurance Agency as well as the business of its Gas & Propane Distribution unit.
In January, State Auto sold Rockhill’s excess and surplus environmental insurance book of business to Capitol Indemnity Corp., a subsidiary of CapSpecialty.
Financial terms of the transaction with K2 Insurance were not disclosed.
PGIA, which Rockhill acquired in 2014, is a managing general underwriter specializing in excess and surplus lines general liability and excess liability insurance. K2 said the PGIA general liability operations will continue in its current locations of Simi Valley, Calif.; Naperville, Ill.; Richmond, Va.; and Dallas, Texas.
The Gas & Propane Distribution unit writes petroleum distributors and retail operations, propane wholesale and retail, bulk oil distributors, used oil recyclers, crude oil haulers, and common carriers of propane and petroleum products. Its operations will continue in the current Conway, Ark. office, according to K2.
In 2016, State Auto stopped writing program business and realigned its excess and surplus lines unit, Rockhill. Last year State Auto CEO Mike LaRocco said the company decided to exit the excess and surplus business completely. The move is part of State Auto’s continuing turnaround effort following disappointing results in 2015. State Auto had acquired Rockhill in 2009 to enter the excess and surplus lines business.
Overall Rockhill wrote about $260 million in premium in 2016 — about $100 million in casualty, $113 million in program business and the rest in property.
K2 was formed in 2011 by Chairman Pat Kilkenny and CEO Bob Kimmel in partnership with investment firm Endeavour Capital. Today K2 Insurance owns a group of program administrators, retail agencies and insurance carriers. In 2017, it acquired Georgia-based Star & Shield Insurance, an affinity distributor for the public safety community and the WaterPlus, FirePlus and JPA in-force expirations from San Francisco-based Alteris Insurance Services Inc.
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